Importance of Deemed Conveyance

The Society is governed by the MCS Act, Rules and the Bye-laws, common situation which is most prevalent in Cooperative Housing Societies the Members and at times even the Office Bearers are ignorant about Conveyance Deed. Very few realize the advantages of obtaining the Conveyance Deed and the condition that makes it one of the most important Documents that every Society should possess. The provisions of the Bye-laws distinctively mention the Conveyance issue right from Bye-law No 5: The Object of the Society shall be as under: (a) To obtain Conveyance from the Owner / Promoter (Builder) in accordance with the provisions of the Ownership Flats Act and the Rules made there under, of the right, title and interest, in the land with the building / buildings thereon,Further at the first General Body Meeting of the Society where in as per the Bye-law No 89 (a) (vi)Authorizing the Committee to secure Conveyance of the right, title and interest in the property in the name of the Society from the Promoter (Builder).

The elected representatives of the Society in its First General Body Meeting would be authorized by the General Body to initiate the procedure for procuring the Conveyance, which clearly indicates that this issue is of prime importance and requires to be addressed appropriately in the interest of the Society and its members.

Some of the main reasons that we have identified which according to our survey have surfaced as the main reason for the major delay in arriving at a conclusion for taking up the Conveyance matter are as follows.

· Ignorance regarding the subject matter

· Lack of Knowledge / Information

· No initiative from Promoter (Builder) due to vested interest

· Non availability of Documents

· Non Cooperation from Promoter (Builder) & Land Owner

· Non Cooperation from Society Members

· Fear of Litigation and Expenditure

Under the aforesaid circumstances, we advise that as per the Byelaw No 155 (b) the Committee in consultation with the Solicitor or the Advocate of the Society place the Conveyance Deed before the General Body which should take necessary steps for Conveyance. The Committee would then be required to finalize the Draft of the Conveyance Deed with the guidance and assistance of a Professional Advocate. As per the Bye-law No. 155 (c) On approval of the draft Deed by the General Body Meeting of the Society, the Committee shall execute it. In this regard, we advise that the selection of the professional for carrying out this act, the Society needs to ensure that the selected professional is experienced, knowledgeable and competent to carry out the job. There have been innumerable instances where the Society has suffered due to wrong selection of a professional, which not only deprives the Society of obtaining a proper Document but errors in the Document would result in further hard ships that would arise during rectification and corrections that would be required to be incorporated in the Document for no fault of the members. Apart from the excessive expenditure, the time and energy that would be wasted in carrying out the said job is not desirable and can be avoided.

Finally, in a situation where the Society, following the provisions of the Byelaws, carries out the procedure as laid down in the Model Byelaws, and wherein they are required to approach the concerned person/s to execute the Conveyance Deed in favour of the Society and where they encounter problems such as:

· Promoter (Builder) is non cooperative

· Promoter (Builder) not available

· Documents are not available

· Members are unwilling and non cooperative

Under the aforesaid circumstances, there are certain remedies available for the Society to decide upon, wherein as per Byelaw No. 175C(c), they may approach the Civil Court for disputes pertaining to Conveyance. Generally, the time period for Court cases cannot be predicted accurately; yet, if the case is handled properly by a competent professional and where the required documents are made readily available within the stipulated period, a favorable Judgment could be achieved within a period of 5 to 7 years. Approaching theCivil Court has been one of the most preferred remedies considering the verdict that can be achieved from this forum. Similarly another remedy for procuring the Conveyance would be approaching the Criminal Court where u/s 13 of the Maharashtra Ownership Flat Act, 1963, the Society could initiate legal proceedings against the Promoter (Builder) for non Conveyance, where if convicted, the Promoter (Builder) could face an imprisonment term of 3 years and or a fine of Rs.50,000/-.

Although this kind of a legal action could produce the required results, which the Society may consider, we do not advocate this remedy, as we are more keen to procure the Conveyance than imprison the Promoter (Builder) which we feel would not only antagonize the opposite party but make things a little difficult for the common members pursuing the matter. One of the other available legal proceedings, which are gaining far more popularity as an affordable legal remedy, is approaching the Consumer Courts with your grievances. Here, under the Consumer Protection Act, 1986, the Society can file case for defective service. Since, once you purchase a flat, you automatically become a consumer and as a consumer you enjoy certain rights and privileges, wherein as a flat purchaser and member of a Co-operative Housing Society, the Promoter (Builder) is required to convey the Land and the Building to the Society within four months of its registration. Also, as per the law, non Conveyance is an offence and for which the Promoter (Builder) would require making amends and may also require compensating for the wrong doing and or loss incurred on account of non compliance of the statutory requirements. One of the other important remedy that is in the pipeline, is the Deemed Conveyance Bill passed by the President of India. Unfortunately, although the bill has been signed by the Hon’ble President of India in the year 2008, it is yet to see the light of the day. We are optimistic that with the formation of the rules and the procedure involved, this remedy would be one of the most preferred remedies.

As per the bill, the DDR of Co-operative Societies has been appointed as a Quasi Judicial Authority who would be conducting a fair hearing by summoning the concerned Promoter (Builder) and the Society to pronounce his / her judgment which would be achieved within a period of 6 months. Once the Deemed Conveyance procedure comes into existence, we shall be able to comment on its outcome and effectiveness. As of today, we recommend that the Society appoints a professional consultant to assist and guide the Society to achieve the formalities for considering to move for procuring the Conveyance using any one of the above mentioned remedies. Considering our experience with a majority of the Societies where it is seen that documentation wise there are huge lacunas and lack of knowledge results in incomplete paperwork which prevents the Society from initiating the move to procure the Conveyance.

Conveyance is the right and privilege of every Society which comes into existence within four months of its formation. Considering the changing scenario in the real estate sector, expenditure for procuring the Conveyance would be comparatively negligible in comparison to the benefits the Society and its members would derive once Conveyance is procured.